Diaspora remittances: IMTOs opposed new CBN policy, says Emefiele

The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, said on Thursday that some International Money Transfer Operators were bent on undermining the new policy of allowing beneficiaries of diaspora remittances have unfettered access and utilisation to such foreign currency proceeds.

Emefiele noted that over the past few days, the CBN had announced new policy measures in the country’s remittance programme, designed to boost and facilitate an efficient flow of remittances sent home by Nigerians in the Diaspora.

He said the changes were as a result of our internal review of the operations of IMTO in the country and the potential impact improved flows could have on the economy.

“Given the estimated annual remittance inflow of close to $24bn, which could help in improving our balance of payment position, reduce our dependence on external borrowing and mitigate the impact of COVID-19 on foreign exchange inflows into the country, the CBN sought to find ways to support improved remittance inflows into the country through official channels,” he said.

He said the CBN analyzed data on IMTO inflows into the country over the past year, and discovered that some IMTOs were not competing on improving transaction volumes and create more efficient ways for Nigerians in the Diaspora to remit funds.

He said they resorted to engaging in arbitrage arrangements on the naira-dollar exchange rate, adding that this, to a large extent, resulted in a significant drop in flows into the country.

“It also encouraged the use of unsafe unofficial channels, which also supported diversion of remittance flows meant for Nigeria, thereby undermining our Foreign Exchange management framework,” Emefiele added.

He said in an effort to boost remittance inflows and foster an environment that would enable faster, cheaper, and more convenient flow of remittances back to Nigeria, the apex bank, on November 30, 2020, announced a new policy initiative.

According to the new policy, beneficiaries of diaspora remittances, through IMTOs shall henceforth receive such inflows in foreign currency (US dollars) through the designated bank of their choice.

It said such recipients of remittances might have the option of receiving these funds in foreign currency cash or into their ordinary domiciliary account.

Emefiele said, “In the course of following up on the implementation of the aforementioned new policies, the CBN observed some pushback by some of the IMTOs who were bent on undermining the new policies.

“This was the reason the CBN had to insist on Wednesday, December 2, 2020, that all Deposit Money Banks must close all Naira General Ledgers through which the Naira remittances were hitherto being carried out.”

He said as a result of the engagements that took place with major IMTOs and the DMBs on Thursday (today), the stakeholders had committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday (tomorrow).

“I, therefore, seize this opportunity to announce to Nigerians both at home and in the Diaspora that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow (Friday),” he added.